A Comparative Analysis of U.S. v E.U. Whistleblower Law
By Samantha Feinstein and Tom Devine
On April 16, 2019, the European Parliament approved the European Union (EU) Whistleblower Directive, formally called the “Directive on the Protection of Persons Reporting on Breaches of Union Law.” The Directive is legally binding and requires EU member states to adopt national whistleblower laws that have better standards than the United States’ laws achieve. A few examples include: protection for more people and institutions; protection against civil or criminal liability; legal assistance for those who cannot afford a lawyer; and burdens of proof that provide whistleblowers a presumption of retaliation if they prove they engaged in protected activity before the burden shifts to the employer who must demonstrate that the action was “not linked in any way” to the reporting or the public disclosure. Currently, only fifteen member states have a national whistleblower law: Belgium, Croatia, France, Great Britain, Hungary, Ireland, Italy, Latvia, Luxembourg, Malta, Netherlands, Romania, Slovakia, Slovenia, and Sweden. All of these member states will need to update their national whistleblower laws to meet the minimum requirements of the EU Whistleblower Directive. In addition, the following member states will be required to enact a new law for the first time: Austria, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, Germany, Greece, Lithuania, Poland, Portugal, and Spain.
The United States was the first country to enact a whistleblower protection law. In 1970, President Nixon signed the first whistleblower act into law, through witness protections in the Occupational Safety and Health Act. In 1978, Congress passed the Civil Service Reform Act, which protects whistleblowing in federal agencies. Since then, the federal government has enacted approximately sixty whistleblower laws, all of them varying in standards and effectiveness. The United Kingdom followed the U.S. when Parliament passed the Public Interest Disclosures Act of 1998, which came into force in July 2, 1999.
Government Accountability Project, the leading whistleblower protection and advocacy organization, used lessons learned from four decades of whistleblower litigation and policy consultations worldwide to author the International Best Practices for Whistleblower Policies (herein “best practices checklist”). The best practices checklist includes twenty requirements. The below chart does not address all items on the checklist, but provides an overview of several important differences and similarities between U.S. and E.U. whistleblower law.
| Burdens of Proof |
| United States: Whistleblower must make a prima facie case that they had a “Good Faith” or “Reasonable Belief.” [1] Then the burden shifts to the employer to show with clear and convincing evidence that it would have made the same decision anyway (independent justification). Constitutional law and State laws require for a prima facie case that preponderance of the evidence shows the whistleblower’s speech was the “predominant motivating factor” for terminating the employee. Then the employer only needs a preponderance of evidence of an independent justification. The WPA only requires a causal relationship, with motives by either party irrelevant. The employee proves a prime employer must show with clear and convincing evidence it would have made the same decision anyway.[2] |
| EU Directive: The EU Directive stipulates that motives of the reporting person in making the report should be irrelevant as to whether they should receive protection. The Directive’s texts at Article 15, #5, and Article 21 at #5 provides that after a presumption of retaliation the employer can prevail by “proving that this measure was based on duly justified grounds.” The Recital provides further guidance for national laws on how to interpret this. It states, at 32 (para.71) that after the whistleblower has proven a prima facie case, the “burden of proof should shift to the person who took the detrimental action, who should then demonstrate that the action was not linked in any way to the reporting or the public disclosure.” |
| Scope of Coverage |
| United States: Employees. The Federal employee statutes protect job applicants, incumbent and former employees. A separate law[3] extended whistleblower protection to federal contractors, subcontractors and grantees.Interns, fellows, volunteers, shareholders, Legislative and Judicial branch employees are all unprotected.[4] As are employees that are excepted from competitive service because of its confidential, policy-advising character. Some statutes include “any individual” such as Dodd Frank. [5] |
| EU Directive: Broad coverage throughout the labor force, extending to volunteers, unpaid interns, self-employed, temporary workers, contractors, subcontractors, and former employees. It also protects corporate shareholders and suppliers. EU and third-country nationals may be protected by virtue of their work related activities. Trade unions and workers representatives receive protection for assisting the whistleblower. (Article 4) |
| Qualified Retaliation |
| United States: Any prohibited personnel action taken, threatened, or failed to take with respect to any employee or applicant because of their protected disclosure.[6]U.S. law does not explicitly prohibit “tolerated” retaliation. |
| EU Directive: Any retaliation, whether direct or indirect, taken, recommended, or tolerated. Retaliation is any act or omission occurring in a work-related context, which causes detriment because of whistleblowing. (Article 6 #11 and Chapter VI Article 19) |
| Scope of Subject |
| United States: Gross waste, fraud, abuse of authority, gross mismanagement, Illegality, substantial danger to public health and safety. (see 5 U.S. Code § 2302(b)(8) and 5 U.S. Code § 1213) |
| EU Directive: Broad subject matter for protected disclosures, but limited to illegality and in this respect narrower than U.S. rights. Includes laws on: (1) breaches in public procurement, (2) financial services, products and markets and preventing of money laundering and terrorist financing, (3) product safety, (4) transport safety, (5) environment protection, (6) radiation and nuclear safety, (7) food and feed safety, animal health and welfare, (8) public health, (9) consumer protection, (10) protection of privacy and personal data, and security of network and information systems. The directive also protect disclosures of breaches affecting the financial interest of the EU and breaches relating to the internal market including breaches of competition and State aid rules. The Directive does not extend protection to reports of breaches that are already in the public domain, are hearsay, or unsubstantiated rumors. (Article 2) |
| Types of Relief |
| United States: Interim relief. Compensatory damages. Consequential damages and attorneys’ fees are available in nearly all U.S. whistleblower laws. Only one U.S. federal law, Sarbanes Oxley, includes personal liability. |
| EU Directive: Interim relief. (Article 21 #6) “Compensation in full.” Could include reinstatement, lost wages, future lost income, legal fees, medical treatment, pain and suffering. There is personal liability for retaliation. (Article 23) |
| Bans civil and criminal liability for protected speech |
| United States: No |
| EU Directive: Yes. If the whistleblower has reasonable grounds to believe disclosing information in breach of non-disclosure or other confidentiality or loyalty clauses was “necessary for revealing the breach,” then the whistleblower is protected. If the whistleblower reveals documents they had lawful access to and they make copies or remove them from the premises they are immune from criminal or civil liability. However, if a whistleblower criminally breaks and enters, hacks or trespasses to obtain the evidence then they are not immune from criminal liability. (Article 21) |
| Corporate policies and procedures requirement |
| United States: No. There is no requirement for the private sector to have whistleblower policies or procedures. |
| EU Directive: Yes. The EU Directive requires all private sector “legal entities” with 50 more employees have a whistleblower policy and procedure in place irrespective of the nature of their activities. *The person or department receiving reports must allow confidential reporting, be independent, and conflict of interest-free. (Article 8) |
| Public sector policies and procedures requirement |
| United States: Yes. The Inspector General Act of 1978 and Whistleblower Protection Act created independent investigatory agencies to handle federal employees’ whistleblower claims. However, these are generic remedial agencies rather than agency whistleblower offices, which on the federal level only exist at the Departments of Energy, Veterans Affairs and the Federal Aviation Administration. |
| EU Directive: Yes. All public sector legal entities must have an internal reporting channel in place. *The procedure may include an authorized third party to receive reports on behalf of public and private entities such as trade unions, external counsel, auditors, or works’ representatives. (Article 8) |
| Gag-order shield |
| United States: The Whistleblower Protection Act and 15 out of 16 corporate laws starting with Sarbanes Oxley Act in 2002 protect whistleblowers from liability for breaching non-disclosure agreements. The Dodd-Frank Act does not include this right. *Government Accountability Project is working with Congress on an amendment that would include a gag-order shield. |
| EU Directive: Non-disclosure agreements or other contractual agreements may not waive or limit a whistleblower’s right to make a protected disclosure. (Article 24) |
| Audience |
| United States: Internal whistleblowing is covered.[7] Each Act designates an Agency/s to whom disclosures may be made. Disclosures are protected if made in court, to Congress, Inspectors General, law enforcement agencies, or other designated agencies. Public disclosures are protected, unless the information is classified or its release is specifically prohibited by statute.[8] |
| EU Directive: Although the directive encourages internal whistleblower disclosures, under the following exceptions a whistleblower may make a disclosure to an external or public audience: (1) They would suffer retaliation for reporting; (2) competent authorities would be better placed to take effective action to address the breach because the ultimate responsibility holder was involved in the breach or evidence may be destroyed or concealed; (3) the breach requires urgent action to safeguard the life, health, and safety of persons, or to protect the environment; (4) the reporting person’s job duties require them to report to national authorities; (5) The breach is a criminal offense. (Chapter IV, Article 15) |
| National Security/Intelligence Community Whistleblower Rights |
| United States: Yes. Under separate intelligence community laws and policies, weaker protection for intelligence community employee and contractor whistleblowers from retaliation for reporting to congressional intelligence committees a complaint or information with respect to an “urgent concern” [9] Civilian Department of Defense and National Aeronautics and Space Administration federal contractors, subcontractors and grantees are also protected.[10] In addition, Military service-members receive protection in the Military Whistleblower Protection Act of 1988.[11] |
| EU Directive: National security remains the sole responsibility of each member state. The Directive does not apply to beaches related to defense or security procurement. However, member states can expand their whistleblower laws to include protection for national security and intelligence community reporting persons. (Article 3) |
| Secure reporting |
| United States: All U.S. laws have confidentiality protection. |
| EU Directive: Yes. Confidential whistleblowing is protected as well as secure communication protocols. However, member states have discretion to decide whether to follow up on anonymous disclosures. (Article 5) |
[1] Under the WPA, no reasonable belief is required for communications to the Inspector General or Office of Special Counsel – it’s all protected speech. If disclosures are made through other audiences, including the media, the complainant needs to have a reasonable belief. See Lachance v. White, 174 F.3d 1378, 1381 (Fed. Cir. 1999)
[2] McCarthy v. International Water Boundary Commission, MSPB No. DA-1221-09-0725-W-1, 116 MSPR 594 (2011)
[3] 10 USC 2409; 41 USC 4712.
[4] 42 U.S.C. § 1982, The Civil Rights Act of 1866, allows all citizens of the United States to report discrimination in the sale or lease of property. All persons within the jurisdiction of the United States may be protected for reporting discrimination in contracts.
[5] See 7 U.S.C. § 26 and 17 C.F.C. 165
[6] 5 U.S. Code § 2302
[7] The Supreme Court held in Digital Realty Trust, Inc. v. Somers, 138 S. Ct. 767 (2018) that protected whistleblowing is limited to disclosures to the Securities and Exchange Commission (SEC). Congress is working on updating the Dodd-Frank Act to cover internal disclosures.
[8] 5 U.S.C. §2302(b)(8)
[9] Codified in Lloyd-LaFollette Act of 1912 5 U.S.C. § 7211 (for federal employees), Intelligence Community Whistleblower Protection Act of 1998, Pub. L. 105-272 Presidential Policy Directive PPD-19 (October 10, 2012) 50 U.S.C. § 3234 5 U.S.C. § 2302(a)(2)(A)
[10] Codified in The National Defense Authorization Act for Fiscal Year 2013 (made permanent in P.L. 114261 and codified in 41 U.S.C. § 4712 (civilian) and 10 U.S.C. § 2409 (Department of Defense and National Aeronautics and Space Administration)
[11] Codified in Military Whistleblower Protection Act of 1988 10. U.S.C. § 1034